Notice, each one of the brands had to clarify its alignment toward the purpose. Identifying a larger purpose put P&G back on course. The 175‐year‐old consumer giant remains one of the most admired companies in the world. The company's story demonstrates that no matter how big you are or how long you've been in business, you can always reclaim your Noble Purpose.
Southwest Airlines is another commonly cited example of a company founded on a Noble Purpose. Since you've already seen how Noble Purpose is being used by several less‐high‐profile firms, I'll use Southwest here to illustrate the difference between mission, vision, and purpose. Roy Spence, who worked with Southwest on their purpose in the early days, explains in his book, It's Not What You Sell, It's What You Stand For:
Purpose is the difference you're trying to make.
Mission is how you do it.
Vision is how you see the world after you've done your purpose and mission.
He illustrates how it works at Southwest:
Purpose: “Southwest Airlines is democratizing the skies.”
Mission: “We democratize the skies by keeping our fares low and spirits high.”
Vision: “I see a world in which everyone in America has the chance to go and see and do things they've never dreamed of—where everyone has the ability to fly.”
Their purpose, democratize the skies, trumps everything. It doesn't make Southwest immune from market pressure or potential hazards in the high-stakes, high‐risk game of air travel. What their purpose does do is point their team and act as a lens for decision‐making. If your mission and vision are vague, or you don't have them, don't worry. The right purpose is the most important thing for pointing your team.
Spence tells a famous story from several years ago. Consultants came into Southwest and said that if they started charging for bags, they would immediately add $350 million to the bottom line. “All the other airlines are doing it,” the consultants said. Southwest could make a fast profit if they did the same.
Senior leaders Dave Ridley, Gary Kelly, and others said, “No, that violates the purpose of our company,” and instructed the team to “go find the money.” Charging for bags wouldn't give more people the chance to fly; in fact, it would make the skies less accessible.
“But you'll make more money,” said the consultants and finance team. The answer was still, “No. It doesn't serve our purpose.” Ultimately, Southwest's refusal to stray from their purpose made them money instead of costing them money. Southwest launched an ad campaign called “Bags fly free.” Nine months later, the financial team reported the results. By running the ad campaign and sticking to their purpose, Southwest drove $1 billion in new revenue, taking additional share from their competitors.
Your NSP keeps you focused on what matters: the customer.
Preventing Your Personal Wells Fargo
The primary purpose of an NSP is to create competitive differentiation and emotional engagement, and to give you a North Star during times of challenge and uncertainty. Having said that, an NSP can also keep you safe from costly mistakes and ethical lapses. Your NSP keeps your team from going down a rabbit hole of unethical behavior simply to hit their numbers.
The Harvard Business Review 2019 issue's lead article, “Are Metrics Undermining Your Business?,” describes a problem the authors refer to as strategy surrogation. Surrogation occurs when the metric of a strategy replaces the strategy itself.
Using Well Fargo to illustrate, authors Michael Harris and Bill Taylor describe how employees at Wells Fargo opened 3.5 million deposit and credit card accounts without customers' consent in an effort to implement its now‐famous cross‐selling strategy. CEO John Stumpf frequently told his team, and the press, cross‐selling is the centerpiece of Wells Fargo's strategy.
To be fair, sometimes Stumpf added that cross‐selling was the result of serving customers well. But Wells Fargo didn't spotlight daily measurements of how well they served customers. Instead, they measured and rewarded cross‐selling. In effect, the metric became the strategy. And we all know how that turned out.
The HBR piece says, “The costs from that debacle were enormous and the bank has yet to see the end of the financial carnage. In addition to paying fines ($85 million) reimbursing customers for fees ($6.1 million) and eventually settling a class action lawsuit to cover damages as far back as 2002 ($142 million).” The authors note, “Wells Fargo faces strong headwinds in attracting new customers.” The reputational damage will follow the company for at least a decade, and probably closer to a generation.
Surrogation: When the Metric of the Strategy Takes the Place of the Strategy
While Wells Fargo may be the current poster child for bad behavior, they're hardly the first firm to focus on the metric instead of the strategy or to look inward, at objectives, versus outward, at customer impact. That's why you want to make your NSP—the impact you have on clients—as clear and present as you do your sales targets.
Surrogation occurs in even the most well‐intentioned organizations because client impact is hardier to codify than sales numbers. Leadership authentically proclaims, “We want to be customer‐driven.” But when they try to find a way to measure the success of their strategy, it's easier to double down on a single indicator, like cross‐selling.
Organizations driven by a Noble Purpose measure cross‐selling and other typical revenue‐driven metrics. But they use a multitude of additional metrics. They assess leading indicators—which tend to be more qualitative—rather than relying solely on sales numbers, which are more quantitative lagging indicators.
For example, Atlantic Capital Bank, which you read about earlier, measures the number of referrals they get from clients. Rich Oglesby, President of the Atlanta division, says, “It's an imperfect number, but it tells us how well we're delivering on our Noble Purpose—we fuel prosperity.” The team does not get individual bonuses on the number, so there's no incentive to cheat or say you got a referral when you didn't or steal someone else's referrals. Instead, the team tracks referrals and celebrates them as a metric of how they're performing in live time as a team.
Revenue is a lagging indicator: it tells you how well you did in the past. Client referrals are a more leading indicator. They tell you what clients are experiencing with your organization right now. When they love doing business with you, your clients become your best ambassadors. Part of a purpose‐driven strategy is to identify the leading indicators that tell you how you're doing with clients today. These vary by industry and organization. Once you're clear about your NSP—the impact you want to have on customers—it's easier to find the metrics that will measure your progress.
Business is a series of qualitative behaviors and beliefs that produce quantitative results.
The leadership opportunity is at the beginning of the process to shape the language and beliefs of the organization. Those are 100% within leadership's control. If you focus on